ONGC wants to buy Malaysian oil assets

SummaryTop Japanese trading house Mitsubishi Corp has submitted a non-binding bid to buy Murphy Oil Corp’s Malaysian oil and gas assets valued at about $2.5 billion, a person familiar with the matter told Reuters.

Top Japanese trading house Mitsubishi Corp has submitted a non-binding bid to buy Murphy Oil Corp’s Malaysian oil and gas assets valued at about $2.5 billion, a person familiar with the matter told Reuters.

India’s state-owned Oil & Natural Gas Corp and Oil India Ltd are among the other suitors preparing to submit bids for the Murphy assets, separate sources with direct knowledge of the process said.

ONGC and Oil India would “most likely” submit a joint bid for the assets, one of the sources directly involved in the process said, something they have done in the past for overseas energy assets.

A final decision on the Indian firms’ bid will be made by the government, another person familiar with the process said.

The Indian companies are likely to submit preliminary bids for the Murphy stake by the end of this month after getting mandatory internal approvals, said the sources, who declined to be identified as the process is not public.

“We want energy security. The focus of energy security should be to get the resources to India if need be. It should not be for investment's sake only,” a senior Indian government official told Reuters.

Arkansas-based Murphy, which has interests in oil and gas fields in Malaysia, Vietnam, Indonesia, Brunei and Australia, has invited bids for a 30% stake in its Malaysian assets, Reuters previously reported. “ONGC’s strategy has always been to increase production overseas and it has largely been because in the domestic market, they have not had much success,” said Prakash Joshi, director of equity research at IDFC Institutional Equities.

India’s state explorers including ONGC have been hunting overseas as they struggle to arrest decline from local gas fields and boost the country’s energy security.